Cellular-News, UK
20th September 2007

Russia & Central Asia: Three More Markets Break the 50% Barrier

Having seen Kazakhstan become the second market in the region after
Russia to cross the 50% penetration barrier in the first quarter of
this year, in Q2 we witnessed an influx of new members to the over-50%
club, with Georgia, the semi-autonomous Nagorno-Karabakh region and
Azerbaijan reaching 53.3%, 52.8% and 50.0% respectively. All three
markets posted gains in penetration in excess of 4pp in the quarter,
but the largest increase was recorded by Kazakhstan, which added
7.3pp; in fact this is the largest quarterly gain of any market in the
region for over a year.

On an annual basis, Kazakhstan again leads the way with a gain of
21.8pp to reach 59.9% penetration at the end of Q2 2007, with new
entrant Kazakhtelecom (launched 21/2/07) contributing significantly to
the increase. Although its penetration rate is not rising as quickly
as Russia’s was at a similar stage, its quarterly gains in penetration
have been increasing and if current trends continue, it could break
through the 75% barrier by the end of the calendar year.

Armenia recorded the second highest annual gain in penetration, adding
21.2pp to hit 48.9%, and it has almost certainly already become the
sixth market in the region to pass 50% penetration at the time of
writing. It will be some time before any other markets break this
barrier however, with Kyrgyzstan being the next most penetrated
country in the region after Armenia at just 30.0%.

The four least penetrated markets in the region – Tajikistan,
Uzbekistan, Afghanistan and Turkmenistan – also took the bottom four
places in terms of annual gains in penetration, with none of them
managing more than a 10pp increase. However, in proportionate terms,
all four posted a penetration rate at the end of Q2 2007 which was at
least double that of the previous year.

Unsurprisingly, Russia remains by far the most penetrated market in
the region with a rate of 112.1%, similar to that of Western European
countries such as Sweden and the UK. Despite passing 100% penetration
in Q3 2006, the rate has continued to rise steadily in the past year
with an annual gain of 14.4pp in the 12 months to 30th June 2007.

Posted to the site on 20th September 2007